Farmers worry good corn crop could mean low prices

EAU CLAIRE – Agricultural officials are projecting an 11 percent increase in the size of Wisconsin's corn harvest this year, a prediction that has farmers worried prices will drop too low for them to make a profit.

State projections call for corn yields of 162 bushels per acre, an increase of 16 bushels per acre from last year.

Chippewa Falls farmer Randy Woodruff, a member of the Wisconsin Corn Promotion Board, said farmers are preparing by trying to keep their costs down.

"Corn prices could drop below the cost of production, and that's going to cause a few problems," he said. He predicted that low corn prices will persist for several years, and that farmers will be more likely to diversify into other crops such as soybeans.

A bountiful crop could mean corn prices of $3.50 per bushel, about half of the 2012 price, Woodruff said.

While that could mean financial pain for some farmers, many have some sort of forward contracting that has them locked into a better price.

Richard Halopka, an agriculture agent in Clark County, noted that if prices are too low, farmers don't have to sell right away.

"One unique thing in this county is that we do have a fair amount of storage locally, which could get stretched if we have a bumper crop," he said. "Lots of what is grown here though goes to livestock on the farms."

Grain farmers strapped by rising cropland rent

An increase in rent for cropland in Wisconsin is strapping grain farmers who are dealing with plummeting prices for corn.

Competition among farmers for land to grow crops or dump manure helped lead to an increase of about 8 percent for rented cropland this year compared to 2013, analysts said.

The average cost to rent non-irrigated cropland was $130 per acre this year, an increase of $10 from last year, according to the National Agricultural Statistics Service. Rent is highest in Lafayette County, which has a 9 percent increase to $231 an acre, followed by Grant County at $221 an acre, Walworth County at $192, Green Lake County at $182 and Dane County at $179 per acre, the report showed.

Grain farmers saw corn prices drop 40 percent to around $4 a bushel in 2013. Farmers need to get around $5 a bushel for their corn in order to meet 2014 rent prices, said Bruce Jones, a University of Wisconsin-Madison agriculture economics professor.

"There's a lag effect," Jones said. "The rents we paid in 2014 were a function of 2012 and 2013 (corn) prices. When the farmers negotiate in 2015 and corn is below $4 and soybeans are down as well, that should keep prices from rising and we may see some moderate decline in some places."

Jones said competition for rented cropland is stiffer in Wisconsin because of its strong contingent of dairy farmers. With record-high milk prices, the farmers need more land to apply manure from their growing herds.

"The amount of money that dairy farmers have to support their herds will remain strong. That's why I think rents aren't going to go down much in 2015 in Wisconsin," Jones said. "Dairy farmers have the means to support the cost of rent. They'll be in there competing for land."